www.michaelagrier.com

Behind 'the company for women,' meet the man instrumental to Avon Products, Inc.'s logistics process

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By: Julia Kuzeljevich
2009-04-01

Around the world, on any given day, a woman will pick up an Avon catalogue left in her office or mailbox by a colleague, neighbour or friend, and take a few moments to view a vast array of cosmetics, skin and hair care products, shoes, clothing, children's toys, holiday ornaments and other small trinkets, available to order from the comfort of home.

It's shopping made simple, and for the many Representatives (capital R!) whose names and contact numbers appear on the back of the brochures, it's a tremendous networking and money-making opportunity, a chance to get back into the workforce slowly, or a chance to make work 'work' for them, at their own pace and schedules.

Avon is a direct seller in 100-plus countries, with nearly six million Representatives around the world. They submit orders to their local distribution centres and the orders are then shipped out to the Representatives' home and on to the customer.

Avon does not require payment up front for an order, and as a result, is considered one of the largest micro-lenders in the world. Avon also boasts a research facility in Suffern, N. Y., home of its founder David H. McConnell, for its skin care and cosmetics lines.

Anecdotally, it's said that small items, like a new lipstick or hand cream, are the kind of pick-me-up products that women will continue to purchase, even during tough times. The company that has branded itself 'the company for women' currently takes in over $10 billion in annual revenue.

Avon Products, Inc. also recently announced that it expects to achieve higher-than-anticipated annualized savings and benefits approaching $900 million as a result of a strategic sourcing initiative and a recent product line simplification. The company is also restructuring to focus on global supply chain operations, targeting annualized savings of approximately $200 million upon full implementation by 2012-2013, the company said.

Avon's strength in the direct-selling market depends on a vast and streamlined logistics network, and on close collaboration between its logistics team and its carriers.

The man who's been close to that process for the last few years is Michael Grier, named the Canadian Industrial Transportation Association's (CITA) Supply Chain Executive of 2008 for his work on a strategic sourcing initiative of the Avon logistics network and for his leadership qualities overall.

Grier's confident and forthright manner is evident several minutes into his interview with CT&L. But so is his ability to put people quickly at ease. It is not difficult to imagine him negotiating with confidence, while keeping the mood light-hearted.

"It's a very unique business model in that we own the brand and the channel. We're the largest direct seller in the world and in a vast majority of cases we develop and manufacture the products we sell," said Grier.

"In direct selling, we don't just deliver to the distribution centre or retail store. We take it from the DC and deliver it to the home. In the US, there are upwards of a million deliveries a month, along a very extensive logistics network. The portion that I manage is on the international side of the business, along with a terrific team of professionals."

Grier was born in Toronto, raised in Montreal, and became a management trainee for Avon Products in March 1991. He joined as an inventory analyst, and moved into logistics as a supervisor, spent some time running the call centre, did some work with campaign administration and finance, sourcing, global customer service and sales operations. All in all, Grier covered more than a dozen positions in 16 years with Avon Canada, relocating to New York in spring of 2007 to lead the international logistics organization for North America.

At one time, Avon Canada had a manufacturing, customer service, product development, and marketing group within. Grier worked in several of these divisions, which he said was excellent for understanding the end-to-end supply chain.

An instrumental part of Avon's recent strategic sourcing strategy was to build a long-term strategic partnership with top tier logistics companies.

"In doing so we found some unique business opportunities," said Grier. "For example, in ocean freight, typically different Avon regions would bid separately. We cumulated our volume on a global RFP in March 2007 and determined how to allocate this. It helped to rationalize our vendor base, concentrate spend and greatly reduced our cost. SSI was a fascinating exercise. There were millions of lines of data to go through but it yielded tremendous results," he said.

Stan Czebruk, business unit leader for logistics at Avon Canada in Montreal, said that during the strategic sourcing initiative, Grier got all the prospective carriers on board to quote on business for two years.

"This process was instrumental in getting both reduced costs for Avon, and also provided two-year security for our carriers. He consolidated the business to get the best costs for Avon, also creating opportunities for Canadian carriers to submit quotes from the US for Avon US business. As a result, he saved Avon Canada significant costs and benefited the carriers who had opportunity for some incremental business," said Czebruk.

"Grier is dedicated to the transportation field, and has all the 'Avon values' such as integrity, commitment, and humility. He is determined to find the optimal solutions and understands our Avon customers, and how to achieve the best results for the end customer and for shareholders. He maximizes best business relationships," he added.

Many who have worked with Grier agree.

"I am pleased to hear that Mike is winning this award. When meeting him as a new client for the first time, there was reason to be a little nervous, but I immediately found him to be very approachable, and he made it clear that the purpose of his visit was to make the transition as smooth as possible by helping in any way he could," said Ron Coutts, president of Coutts Courier.

"Our company was successfully engaged in the deliveries of Avon product throughout Atlantic Canada. Mike was always avail- able for meetings and discussions which focused on service improvements. He actively worked with the carriers on implementing technological enhancements to improve service measurement to his ultimate customers, the Avon Representatives. Mike has exceptional knowledge on all aspects of the supply chain and (is) a skilled negotiator, ensuring that both parties win in the end," said Bruce Rodgers, president of Sameday, Right-O-Way.

In order to better facilitate a win-win scenario, said Grier, "Probably the most critical thing we can do today is to sit down with key providers and bundle our businesses. What we do is to look at our volume regionally, and across the different modes, air, ocean, trucking, etc., and pair up those spends across multiple regions. There is opportunity for amalgamated spend in different regions and across different categories."

Avon's Representatives, meanwhile, have benefited from an onslaught of technology that has created an avenue for changes. In late 2005, the company started Internet ordering in Canada and better than 80% of Representatives in Canada are using this method, added Grier. It accelerated turnaround and allowed the Representative an easier ordering pattern.

"The increase in our use of technology is a tremendous catalyst for change. When we talk to Representatives, a key concern is wanting to know where the order is and when it is expected to arrive. The Representative's order is her earnings opportunity, and this is what separates us (direct sellers) from other companies. She is going to package it for her customers and in turn, get paid. What technology has given us is the Representatives' ability to order online and the track and trace capability," said Grier.

Phil Marlowe, president of Acuitive Solutions, worked with Avon USA in 2003 on the implementation of an airfreight approval management platform.

"Lots of politics and turf issues had to be planned around, so the three-phase implementation took the better part of nine months to complete. When Mike's team decided to sign on to the program, it took under six weeks to implement from start to finish. Why? Mike's big picture vision transcends the silos in an organization, his breadth of experience allows him to easily grasp the interests of the applicable stakeholders and interact with them non-confrontationally, and his leadership style focuses on results -not power. What more could you ask for in a supply chain executive?" said Marlowe.

In 2008, Avon ramped up from a three-week interval between brochure 'campaigns,' i. e. between catalogues distributed for a particular order period, to a two-week campaign.

"This meant going from 18 brochures per year up to 26. This short turnaround was a monumental change for sales and marketing and also a huge challenge for carriers. We all worked in terms of perfecting the model," said Czebruk.

"We began the discussions two years before going live in March 2008," said Grier. "I was given the opportunity to lead the supply chain portion of the project for Canada. It lasted almost 20 months because we had to look at every piece of the business. From a logistics perspective, a lot of the carriers were concerned how they were going to manage the growth. What they normally did in 15 days they now had to do in 10. Our volume increased dramatically from a percentage standpoint with the same calendar throughput."

Key to the process, he added, "was probably picking half a dozen key business partners and sitting down with them, and saying we want you to come back and tell us what would be the best way forward from a service standpoint. It was a back and forth reiteration and we had a team of phenomenal people on this. There are some tremendously talented people here and this is one of the reasons I've been here for 18 years."

Patrick Heaney, chairman and CEO of RCS Logistics, said, "I have been in business for 40 years and every so often you have an opportunity to meet an exceptional person. Mike, for sure, is one of these people. I have had many discussions regarding handling the airfreight product for Avon. Things don't often run smoothly, and this is when you get to better understand the professional understanding a person has. In all my dealings with Mike, he has always showed me personally that he is a first-class person and is a real asset to his company and to his profession."

What makes for good leadership? Grier said that it's about being open with staff and with partners.

"You have to be brutally honest. It's about identifying where we think the stumbling blocks are and sharing that. Many heads are better than one and if you can embrace a collaborative spirit, it's a much more enjoyable environment to work in. It creates an open and honest dialogue with partners. I think you need to understand the impact of your decisions beyond your immediate scope of responsibility. I was groomed as a management trainee -I was afforded great opportunities there. I think you need to be creative. It's not a question of thinking outside the box -throw the box away and whiteboard it. You have to be tenacious. There are always obstacles. You need to have fun, and not take yourself too seriously (even while taking your role seriously)."

"I enjoyed very much working with Mike, who is a man of integrity and honour who believes that a true partnership works both ways. Though very demanding and mindful in protecting the smooth working of the Avon supply chain, Mike is always fair with all of his requests. We at OOCL consider Mike both as a business partner and a friend and are looking forward to continuing our collaborations well into the future," said Stephen Ng, senior vice-president of transpacific territory, OOCL (USA) Inc.

With demand falling in virtually every mode, said Grier, "Now is the time for the shippers to really start to identify who their long-term partners are. Opportunities are bountiful -you just have to know where your company wants to go."

As one of his future goals, Grier would like to get more involved in trade associations, such as the CITA.

"We have to do a lot more for corporate responsibilities with regard to donating time, money, effort. Avon is one of the largest contributors to breast cancer awareness. Volunteerism takes time and effort but is tremendously rewarding and is a great opportunity to network."

Features editor Julia Kuzeljevich has been writing about transportation issues for almost a decade. Her meticulously researched articles have garnered transportation writing awards and several Canadian Business Press Award nominations.